About green construction tax incentives
There are numerous state government and power company programs, rebates and incentives to make choosing sustainable products and practices fiscally rewarding and to induce designers and building owners to adopt green strategies for their facilities. Some of the most financially rewarding of the state and local power company programs can be found at the website: http://www.dsireusa.org
In addition to the programs that vary from state to state and power company to power company, there is also a federal tax deduction available through the Internal Revenue Service for commercial property owners. This tax deduction is for commercial property owners who bring their property up to a minimum level of energy efficiency or even greater. Enacted in the 2005 Energy Policy Act, this federal tax deduction is only for buildings that were retrofitted after December 31, 2005 and prior to January 1, 2009.
The qualifying building must have reduced energy costs resulting from the building's heating, cooling, ventilation, hot water and interior lighting by 50% from a reference building meeting the minimum requirements of ASHRAE 90.1-2001 Standard.
The amount of the deduction is $1.80 per square foot of conditioned area if the 50% improvement is documented. Lesser deductions are available up to $0.60 per square foot if the energy improvements reach a minimum level of 16 2/3% above the reference building mentioned above. The Department of Energy also lists acceptable computer programs that can be used to calculate and verify the energy improvement. It is unknown whether this tax deduction will be extended beyond January 1, 2009 at this time.